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The pension crisis in Chicago and Illinois

An ongoing Tribune investigation finds that political dealmaking contributed to a financial crisis in Chicago and Illinois pension funds, threatening the retirement of public employees and potentially putting taxpayers on the hook for billions of dollars.

— Illinois lawmakers narrowly approved a historic, sweeping overhaul of government worker pension systems Tuesday, overcoming years of political and philosophical differences in an attempt to address one of the state's most pressing financial problems.

A key member of a legislative panel charged with finding a way to fill Illinois' worst-in-the-nation unfunded pension liability said Sunday that she believes it is "very likely" a plan to change state retirement benefits could be agreed upon to present to lawmakers next month.

Illinois Senate President John Cullerton said Sunday that the state's massive public employee pension debt is not a "crisis," but instead an issue being pushed by business-backed groups seeking lower income taxes at the expense of retiree benefits.

Gov. Pat Quinn said today that a request by Decatur-based Archer Daniels Midland for millions of dollars in tax incentives to stay in Illinois should not be considered until lawmakers first reform the state's highly indebted public employee pension system.

Illinois' crushing public pension crisis has been literally decades in the making, but the present stalemate in Springfield over how to resolve it can be traced in great measure to a single point in time: July 21, 1970.

SPRINGFIELD — Generous health care and pensions will go by the wayside for future political appointees overseeing the Chicago area's local bus and train service, but the current officeholders will get to keep the benefits until they are reappointed to new terms.

Gov. Pat Quinn hinted Tuesday that he may summon lawmakers back to Springfield again this summer to take up public employee pension reform, saying next month's State Fair would provide an ideal time for legislators to work on the issue while also having a little fun.

SPRINGFIELD --- The General Assembly is in special session today to form a conference committee of lawmakers who will try to come up with a way to break a stalemate on government worker pension reform.

Unable to round up enough Senate votes for a sweeping measure to overhaul the state’s public employee pension system, Gov. Pat Quinn has backed off in favor of a plan to a form a committee designed to forge a compromise on the hot-button issue.

A frustrated Gov. Pat Quinn has once again changed strategies in his effort to get a pension reform bill on his desk as he acknowledged Friday he’s “prepared to do whatever necessary” to try to break a deadlock between his fellow Democratic leaders.

SPRINGFIELD — House Speaker Michael Madigan on Wednesday tried to increase the pressure on fellow Democrats in the Senate to get behind his version of pension reform and abandon their own as they head into Gov. Pat Quinn’s special session next week.

SPRINGFIELD — Democrat William Daley says he is “stunned” the state failed to address the pension crisis in the spring session and indicated the legislative meltdown is moving him closer to announcing a decision on whether to challenge Gov. Pat Quinn in the 2014 primary.

SPRINGFIELD --- A major investor ratings service further lowered Illinois' worst-in-the-nation credit rating today following lawmakers' inability to agree on money-saving reforms to the public employee pension system.

SPRINGFIELD --- A plan to allow Mayor Rahm Emanuel to skip a large chunk of Chicago Public Schools pension payments for two years failed today after Gov. Pat Quinn vowed to veto it unless lawmakers also approve comprehensive government worker pension.

— A former lobbyist for a powerful teachers union is reaping a $100,000-a-year state pension thanks to wide-ranging retirement legislation sponsored nearly six years ago by her former boss, House Speaker Michael Madigan, and his legislative allies.

Gov. Pat Quinn acknowledged Monday what most others in state government have said for weeks: It's unlikely that he and legislative leaders will strike a deal on public employee pension reform by his June 30 deadline.

Pension reform in Illinois got a rare legislative victory when the General Assembly moved to close loopholes that allowed labor leaders to land six-figure public pensions based on their much higher union salaries.

As the economy was taking a historic nosedive, parks officials in Highland Park were paying three of their executives far more — $435,203 in one case — than anyone in similar posts across the suburbs, the Tribune has found.

Two Illinois lawmakers on Monday called for hearings to look into local government pension practices after learning how officials with the Park District of Highland Park intentionally used large bonuses to hike the pension of a district executive by more than $50,000.

Gov. Pat Quinn on Monday put a finer point on a notion he's been pushing this spring: no gambling expansion will happen without comprehensive changes to fix a greatly underfunded government worker pension system.

SPRINGFIELD — Senate President John Cullerton today sent his version of pension reform to the House, setting up a high-profile clash with the rival plan Speaker Michael Madigan already pushed through the House.

SPRINGFIELD — Senate President John Cullerton on Monday rolled out his latest proposal aimed at fixing the state's heavily indebted pension system, striking a deal with unions just days after House Speaker Michael Madigan pushed through a plan that's tougher on government workers.

SPRINGFIELD — The top House Republican and a key House Democrat unveiled a pension proposal today that would require state workers, teachers and others under state retirement plans to work longer, chip in more from their paychecks and scales back cost-of-living increases.

SPRINGFIELD — A top House Democrat on Wednesday suggested a new plan to fix the state’s massively indebted retirement system: make the temporary income tax hike permanent, have state workers and teachers chip in more toward their pension and raise the retirement age for full benefits to 67.

SPRINGFIELD — One of the nation's leading credit-rating firms put Illinois on a negative watch list today because Gov. Pat Quinn and state lawmakers failed to address the overwhelming public pension debt in the just-completed lame-duck session.

SPRINGFIELD — Gov. Pat Quinn chastised lawmakers for failing to pass cost-cutting changes to the government worker retirement system, then dangled the possibility that he'd drop his long-running opposition to a major gambling expansion to get a pension deal done.

Efforts by the legislature to expand casino gambling to Chicago and other locations is a secondary issue behind attempts to deal with the state’s unfunded pension liability, Gov. Pat Quinn said Tuesday.

SPRINGFIELD — With time running short in the lame-duck session, state lawmakers on Sunday dropped hot-button issues dealing with guns and marijuana but kept alive hopes of reforming pensions and giving driver's licenses to illegal immigrants.

Gov. Pat Quinn said Thursday that he remains confident lawmakers can reach a deal to reform the state’s government employee pension system by his Jan. 9 deadline, despite the fact House and Senate leaders can’t even agree on which days to come to work.

Gov. Pat Quinn and legislative leaders plan to meet Saturday to try to come up with a compromise to fix financially broken government worker pension systems as the clock ticks down toward the end of the lame-duck session.

Absent significant pension system reforms, it would cost the city an extra $1.5 billion a year beginning in 2016 to start the process of restoring financial health to its pension funds, aldermen were warned Monday.

A coalition of public employee unions issued a report today blasting state legislation to address their vastly underfunded pension systems and offering instead to make increased worker contributions if lawmakers raised $2 billion by ending tax benefits to corporations and imposing new taxes.

SPRINGFIELD - As state government leaders struggle to reach agreement on pension reform, a bipartisan group of lawmakers is floating a plan that's a mix of new and old ideas to try to break the logjam.

For decades, state lawmakers have drawn criticism when they leave the Legislature and take another government gig with a fat salary that greatly boosts their public pensions, but soon the state might be on the hook for less of those retirement costs for a small group of veteran legislators.

A Chicago ophthalmologist who was the focus of a 2009 Tribune watchdog story was indicted by a federal grand jury this month on charges he defrauded his employees' pension benefit plan of more than $180,000.

Gail Purkey wasn't employed by the state of Illinois long enough during the 1980s to earn a state pension. Her stint with House Speaker Michael Madigan's legislative staff, plus her time at the Illinois Arts Council, an agency chaired by Madigan's wife, Shirley, totaled less than seven years. Then she left public employment for a job with the Illinois Federation of Teachers, a statewide group that includes the Chicago Teachers Union.

Mayor Rahm Emanuel today unveiled a new budget that he says doesn't include new tax, fine or fee increases but contains a warning about the financial havoc the city's looming government worker pension problem could wreak.

SPRINGFIELD --- Republicans leaders today wasted no time laying the blame for the state's financial woes at the feet of powerful House Speaker Michael Madigan and his fellow Democrats, saying that now is the time to act like adults and pass sorely needed pension reforms.

When lawmakers left the Statehouse at the end of May, the problem of fixing the nation's most underfunded state public employee pension system was left unresolved amid myriad political concerns and divides.

Fearing cuts to the pension benefits of its “ordinary” members, the Chicago Teachers Union filed a lawsuit in Cook County Circuit Court Tuesday that goes after a state law passed in January that was intended to crackdown on public pension abuses.

— State lawmakers continued to dance around the question of how to fix the state's heavily indebted government worker pension system Wednesday, with the latest two-step unfolding in the Illinois Senate.

Mayor Rahm Emanuel took the rare step of traveling to the Capitol to make a personal pitch for an overhaul of city government worker pensions, saying costs are out of control and the "day of reckoning has arrived."

Two years into his reign as Chicago's longest-serving mayor, Richard M. Daley took advantage of the state's convoluted pension system to significantly increase his potential payout while saving $400,000 in contributions.

Gov. Pat Quinn on Tuesday sought to ease concerns about a recent downgrade in the state's bond rating that cemented Illinois as the state with the nation's worst credit rating, saying he will push for major pension reforms this year to try to reverse it.

All it took for former state Rep. Robert Molaro to nearly double his public pension was spending one month as an aide to Ald. Ed Burke, the powerful chairman of the Chicago City Council's Finance Committee.

Federal authorities have begun a criminal investigation into how nearly a dozen union officials became eligible for inflated city pensions, according to subpoenas obtained by the Tribune and WGN-TV through an open-records request.

State lawmakers took a strong stand Tuesday against union leaders fattening their public pensions, overwhelmingly sending the governor a measure that would close a series of loopholes in response to a Tribune/WGN-TV investigation.

House lawmakers attacked union pension abuses in response to Tribune/WGN-TV investigations, including one that exposed how two lobbyists got public teacher pensions for a single day of substitute teaching.

Two lobbyists with no prior teaching experience were allowed to count their years as union employees toward a state teacher pension once they served a single day of subbing in 2007, a Tribune/WGN-TV investigation has found.

Less than 24 hours after the Tribune reported that at least eight union officials eligible for a city pension also stand to receive one or more union pensions for the same period of work, a House leader filed legislation that would limit them to just the one.

At least eight Chicago labor leaders who are eligible for inflated city pensions also stand to receive union pensions covering the same work period, thanks to a charitable interpretation of state law by officials representing two city pension funds.

Thomas Villanova isn't the only official from Local 134 of the International Brotherhood of Electrical Workers who participated in a city pension and a union pension at the same time, in violation of state law.

The Civic Federation releases a report showing the unfunded liabilities for 10 city and county pension funds grew sixfold from 2000 to 2009, with shortfalls now totaling nearly $23 billion, or $11,000 per Chicago resident.

Trustees of Chicago's failing public pension funds have funneled hundreds of millions of dollars into highly speculative investments that not only have failed to realize outsize returns but also saddled them with underperforming, long-term assets that can't be sold off.

With some city pension funding levels dropping below 40 percent, a question arises that seemed unthinkable just a decade ago: If a pension fund runs out of money, who pays for the retirement security promised to city workers?